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Cantel Medical Reports 29% Increase in Net Income - EPS of $0.29 vs. $0.23 for Quarter Ended January 31, 2010

LITTLE FALLS, N.J., March 9 /PRNewswire-FirstCall/ -- CANTEL MEDICAL CORP. (NYSE: CMN) reported a 29% increase in net income to $4,876,000, or $0.29 per diluted share, on a 6.7% increase in sales to $66,587,000 for the second quarter ended January 31, 2010. This compares with net income of $3,774,000, or $0.23 per diluted share, on sales of $62,420,000 for the second quarter ended January 31, 2009. For the six months ended January 31, 2010, the Company reported a 55% increase in net income to $11,044,000, or $0.65 per diluted share, on an 8.5% increase in sales to $137,582,000. This compares with net income of $7,107,000, or $0.43 per diluted share, on sales of $126,826,000 for the six months ended January 31, 2009.

Andrew Krakauer, Cantel's President and CEO, stated, "We are very pleased to have delivered another strong quarter of sales and earnings growth. These positive results confirm the continued success of our sales and marketing investments and various initiatives to improve operating margins. Cantel continued to benefit from growth of higher margin consumables and service revenue."

Krakauer added, "While all of our businesses performed well, operating income in our Healthcare Disposables, Endoscope Reprocessing and Water Purification and Filtration units was substantially ahead of last year, aided by strong sales of consumables, including disinfectants, sterilants and face masks. Cantel's overall good performance was further supported by the realization of price increases and reduced interest expenses. On an additional favorable note, we also substantially increased sales of capital equipment worldwide in our Endoscope Reprocessing segment. The Healthcare Disposables business had higher than normal sales of face masks in the early part of the quarter as we filled orders generated during the novel H1N1 flu outbreak."  

The Company further reported that its balance sheet at January 31, 2010 included current assets of $90,018,000, including cash of $18,131,000, a current ratio of 1.7:1, debt of $30,500,000 and stockholders' equity of $199,900,000.  Krakauer stated, "The Company has a strong balance sheet and continues to generate significant cash. We have reduced our net debt position during the first half of fiscal year 2010 by 38% to $12,369,000. EBITDAS for the quarter was $11,890,000."

Cantel Medical Corp. is a leading provider of infection prevention and control products in the healthcare market. Our products include specialized medical device reprocessing systems for renal dialysis and endoscopy, dialysate concentrates and other dialysis supplies, disposable infection control products primarily for the dental industry, water purification equipment, sterilants, disinfectants and cleaners, hollow fiber membrane filtration and separation products for medical and non-medical applications, and specialty packaging for infectious and biological specimens. We also provide technical maintenance for our products and offer compliance training services for the transport of infectious and biological specimens.

The Company will hold a conference call to discuss the results for the second quarter ended January 31, 2010 on Tuesday, March 9, 2010 at 11:00 AM Eastern time. To participate in the conference call, dial 1-877-407-8035 approximately 5 to 10 minutes before the beginning of the call. If you are unable to participate, a digital replay of the call will be available from Tuesday, March 9 at 2:00 PM through midnight on March 16, by dialing 1-877-660-6853 and using passcode #286 and conference ID #346358.

The call will be simultaneously broadcast live over the Internet on at A replay of the webcast will be available on Vcall for 30 days.

For further information, visit the Cantel website at

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks and uncertainties, including, without limitation, the risks detailed in Cantel's filings and reports with the Securities and Exchange Commission. Such forward-looking statements are only predictions, and actual events or results may differ materially from those projected or anticipated.

                              CANTEL MEDICAL CORP.                           
                      (In thousands, except per share data)                  
                                        Three Months Ended  Six Months Ended
                                            January 31,        January 31, 
                                            -----------        ----------- 
                                           2010     2009      2010      2009 
                                           ----     ----      ----      ---- 
    Net sales                           $66,587  $62,420  $137,582  $126,826 
    Cost of sales                        39,463   38,809    81,000    79,592 
                                         ------   ------    ------    ------ 
    Gross profit                         27,124   23,611    56,582    47,234 
      Selling                             8,711    6,992    17,235    14,342 
      General and administrative          9,272    9,037    18,577    18,061 
      Research and development            1,157      983     2,422     2,048 
                                          -----      ---     -----     ----- 
    Total operating expenses             19,140   17,012    38,234    34,451 
                                         ------   ------    ------    ------ 
    Income before interest and income                                        
     taxes                                7,984    6,599    18,348    12,783 
    Interest expense                        339      674       726     1,425 
    Interest income                          (8)     (38)      (16)     (108)
                                             --      ---       ---      ---- 
    Income before income taxes            7,653    5,963    17,638    11,466 
    Income taxes                          2,777    2,189     6,594     4,359 
                                          -----    -----     -----     ----- 
    Net income                           $4,876   $3,774   $11,044    $7,107 
                                         ======   ======   =======    ====== 
    Earnings per common share -                                              
     diluted                              $0.29    $0.23     $0.65     $0.43 
                                          =====    =====     =====     ===== 
    Dividends per common share            $0.05      $ -     $0.05       $ - 
                                          =====      ===     =====       === 
    Weighted average shares - diluted    16,983   16,503    16,885    16,478 
                             CANTEL MEDICAL CORP.                        
                    CONDENSED CONSOLIDATED BALANCE SHEETS                
                                (In thousands)                           
                                                      January 31,   July 31,
                                                            2010       2009
                                                            ----       ----
         Current assets                                  $90,018    $88,910
         Property and equipment, net                      35,679     35,968
         Intangible assets, net                           34,591     37,042
         Goodwill                                        115,032    114,995
         Other assets                                      1,259        956
                                                           -----        ---
                                                        $276,579   $277,871
                                                        ========   ========
            Liabilities and stockholders' equity                     
         Current portion of long-term debt               $25,500    $10,000
         Other current liabilities                        27,572     29,113
         Long-term debt                                    5,000     33,300
         Other long-term liabilities                      18,607     18,342
         Stockholders' equity                            199,900    187,116
                                                         -------    -------
                                                        $276,579   $277,871
                                                        ========   ========
    SUPPLEMENTARY INFORMATION                                             
    Reconciliation of Earnings Before Interest, Taxes, Depreciation, 
    Amortization and Stock-Based Compensation Expense ("EBITDAS") 
    The reconciliation of EBITDAS with net income for the three and six 
    months ended January 31, 2010 and 2009, respectively, is as follows (in 
                                          Three Months Ended  Six Months Ended
                                               January 31,      January 31, 
                                               -----------      ----------- 
                                              2010    2009     2010     2009
                                              ----    ----     ----     ----
    Net income                              $4,876  $3,774  $11,044   $7,107 
    Income taxes                             2,777   2,189    6,594    4,359 
    Interest expense                           339     674      726    1,425 
    Interest income                             (8)    (38)     (16)    (108)
    Depreciation                             1,574   1,525    3,138    3,075 
    Amortization                             1,294   1,268    2,572    2,606 
    Loss on disposal of fixed assets           227       8      227       22 
                                               ---     ---      ---      --- 
    EBITDA                                  11,079   9,400   24,285   18,486 
    Stock-based compensation expense           811     525    1,600    1,045 
                                               ---     ---    -----    ----- 
    EBITDAS                                $11,890  $9,925  $25,885  $19,531 
                                           =======  ======  =======  ======= 
    EBITDAS is a measure of the Company's performance that is not required by,
    or presented in accordance with, Generally Accepted Accounting Principles 
    ("GAAP"). EBITDAS is a non-GAAP financial measure defined by the Company 
    as income before interest, taxes, depreciation, amortization and stock-
    based compensation expense. The Company believes EBITDAS is an important 
    valuation measurement for management and investors given the increasing 
    effect that non-cash charges, such as stock-based compensation, 
    amortization related to acquisitions and depreciation of capital 
    equipment, has on the Company's net income. In particular, acquisitions 
    have historically resulted in significant increases in amortization of 
    intangible assets that reduced the Company's net income. Additionally, 
    the Company regards EBITDAS as a useful measure of operating performance 
    and cash flow before the effect of interest expense and complements 
    operating income, net income and other GAAP financial performance 
    measures. Generally, a non-GAAP financial measure is a numerical measure 
    of a Company's performance, financial position or cash flow that either 
    excludes or includes amounts that are not normally excluded or included 
    in the most directly comparable measure calculated and presented in 
    accordance with GAAP. This measure, however, should be considered in 
    addition to, and not as a substitute or superior to, net income, cash 
    flows, or other measures of financial performance prepared in accordance 
    with GAAP. 

SOURCE Cantel Medical Corp.

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SOURCE Cantel Medical Corp.
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